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Bookkeepers Blog, Best Hints & Tips Guaranteed by Tash-Ly
SMART Goal Setting – 20th January 2K16
The last two weeks I have been looking at the S.M.A.R.T goal setting methodology. If you haven’t read them, take a look through my previous blog posts to catch up on my initial introduction to the idea and also the first letter of the acronym – S.
This week I am moving forward and looking in detail at the next letter in the acronym – M.
Measurable
Set key indicators or targets that your progress can be measured against
It is important that goals have measurable components to them. How can a business track their progress and measure their outcomes if they don’t have quantifiable units to compare to? Elements of measurement can include How much or How Many?
Using our example of Josie’s consultancy business, Josie would like to increase her income.
• Specifically, she is looking for an additional $25,000 profit this year.
• From previous experience, Josie knows that her running costs generally come in at around 50% of her revenue, therefore she needs to earn an additional $50,000 revenue to see a $25,000 improvement in her profit.
• Her current turnover is $100,000 so her new goal will be to earn $150,000 for the year. $150,000 per annum is $12,500 per month
With her bookkeeper’s assistance, Josie sets up a budget in her accounting package showing her goal of $12,500 per month, which she can now easily measure how she is tracking against her goal. This amount could be set to include fluctuations throughout the year, ie: May to August are busier months and her revenue could be increased, whilst November to December are frequently quieter months the budget amount could be reduced. Provided the 12 months add up to $150,000 total revenue, Josie can measure her progress to achieve her goal.
One of Josie’s ideas was to attend local networking events to generate new leads. Although this may not include a specific financial component, she can set a measurable KPI (Key Performance Indicator) around this part of her goal,
• attend 2 networking events per month
• arrange to have coffee with 1 new leads each week
Josie can keep records to ensure that she is meeting that target each month, or whether she is falling short of her target.
Josie could expand further into KPI’s of revenue from repeat or new business, the number of times she has repeat sales from each client, the number of services she can offer, dollar or percentage value in decreasing expenses and more.
You should now have Specific goals in mind.
How are you planning to measure them?
What are your benchmarks?
Remember to use responses to the questions of How much or How many.
Disclaimer: All or any advice contained in this blog/newsletter is of a general nature only & may not apply to your individual business circumstances. For specific advice relating to your specific situation, please contact your accountant or other professional adviser for further discussion.